Backers of crowdfunding legislation in North Carolina are about to try once again to convince the North Carolina General Assembly to pass a bill. Opening startup funding to more people has broad bi-partisan support yet legislation has been stalled time after time. Will 2016 be different?
Hope apparently never dies.
The Skinny reached out to investor and big crowdfunding advocate Mark Easley, who is part of a group supporting what is called the NC PACES Act ( “Providing Access To Entrepreneurs/Small Business.”) Once known as the NC JOBS Act, PACES could get a big push once the General Assembly convenes at the end of the month.
“Rick, yes, we expect to be trying again to pass the NC PACES Act crowdfunding bill in the new session,” Easley reports.
“We have had a working group reviewing the exemption to improve and enhance it and make it more aligned with new regulations and changes proposed last year at the Federal level.
“Once the bill has been filed (that expect that to happen very soon after the new session starts at the end of April) we will be happy to provide a more detailed post to you about the latest updates.”
Revisions at the SEC will have to be taken into account in any new legislation.
Momentum to drive crowdfunding across the finish line has been building in recent months.
As WTW reported in February, according to sources, Department of Commerce executives gathered at an all-hands-on-deck meeting at the behest of Commerce Secretary John Skvarla to map out a strategy to get a bill passed after a long delay.
“On intrastate crowdfunding, you are correct, the Commerce Secretary has restarted the conversation,” Easley said at the time.
The meeting took place just days after Skvarla testified before a legislative panel the previous week.
“If we’re not going to help our small businesses, we can talk around these issues all day long,” Skvarla told members of an oversight committee that was examining the economic struggles of rural counties, according to a report by WRAL Capitol Bureau Chief Laura Leslie.
Here are highlights of the most recent bill, which failed last year:
- The exemption allows accredited or non-accredited North Carolina resident investors to invest in equity or debt offerings from a North Carolina company provided the disclosure, reporting, registration, and limits described in the exemption are followed.
- A North Carolina company is allowed to promote the offering to North Carolina residents via the web or any other method provided the disclosure, reporting, registration, and limits described in the exemption are followed.
- A North Carolina company may raise up to $1M with non-reviewed financials, or up the $2M with reviewed or audited financials.
- Accredited North Carolina investors may invest any amount up to the offering limit, and non-accredited North Carolina investors may invest up to $5,000 annually per issuing company.
Maybe this time, crowdfunding will become a reality.